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Women tax payers and income-tax law

Subhash Lakhotia


Like any other individual a woman tax payer can also obtain Permanent Account Number and she can independently be assessed to income-tax.  The basic income-tax exemption for the current financial year for the woman tax payer is Rs 1,90,000.  One very important point which a woman tax payer should note is that they should avoid receiving gifts from three persons namely their husband, their father in law and their mother in law. 


In case gift is received from these persons, the income therefrom will be clubbed as per provision contained in section 64 of the Income-tax Act, 1961.  Also please note that a woman tax payer can receive gift from relatives as well as from non-relatives without any upper limit at the time of her marriage. 


 Another pertinent question which might come in the minds of the women tax payers relates to interest free loan by a married lady particularly from the husband.  The married lady can receive interest free loans from any person.  However, she should avoid receiving interest free loans from husband, father in law and mother in law.  Otherwise the provisions of deemed income and clubbing of income would arise. 


Thus, to avoid any clubbing of income in a situation where a married lady is taking a loan from the husband or her father in law or her mother in law, in that case she should pay reasonable rate of interest to them on the loan so taken so as to avoid any clubbing of income in their hands.  Although the Income-tax Act does not define any reasonable rate of interest which must be charged in case of loan to wife or to the daughter in law but it is recommended that reasonable rate of interest should be charged whenever the loan is advanced to the spouse or to the daughter in law. 


Another important question which arises in the minds of the women tax payers is with reference to salary or commission received by them from the business organization of their husband.  In this situation the women tax payers may kindly note that a married lady can receive salary from her husbandís business organization but whenever such salary is received, care should be taken to note that the married lady should be technically or professionally qualified so as to receive salary from the business organization of the husband. 


If the woman tax payer receives some salary from the business organization of the husband and in case she is not technically or professionally qualified, then the salary amount so received by the woman tax payer from her husbandís business organization will be clubbed with the income of the husband.  Hence, utmost care should be taken whenever salary payment is being made by the husband to the spouse.


Sometimes, a question also arises about the tax treatment in a situation when a woman tax payer receives gifts from prospective husband and the prospective father in law and mother in law before the date of marriage. 


Well in such a situation namely when the lady receives gifts from her prospective husband and the prospective father in law and the prospective mother in law, the same will not be coming within the provision of section 64 of the Income-tax Law and hence no clubbing provision would be attracted. 


This would however, be possible only when the lady receives the gift before her marriage from the future husband and the future father in law and the future mother in law.  This point has already been settled by the Supreme Court of India in a number of cases decided long ago. 


The Author is Tax and Investment Consultant at New Delhi for last 40 years.  He is also Director of M/s. R.N. Lakhotia & Associates LLP & The Strategy. He can be reached at slakhotia@satyam.net.in 

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